Army Cyber Command Spends $172.5M on Microsoft Consulting and Support Services
Contract Overview
Contract Amount: $172,503,500 ($172.5M)
Contractor: Microsoft Corporation
Awarding Agency: Department of Defense
Start Date: 2021-09-30
End Date: 2026-03-31
Contract Duration: 1,643 days
Daily Burn Rate: $105.0K/day
Sector: IT
Official Description: ARMY CYBER COMMANDS MICROSOFT CONSULTING SERVICES AND MICROSOFT PREMIER SUPPORT
Place of Performance
Location: Georgia, 30905
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $172.5 million to MICROSOFT CORPORATION for work described as: ARMY CYBER COMMANDS MICROSOFT CONSULTING SERVICES AND MICROSOFT PREMIER SUPPORT Key points: 1. Significant investment in essential IT infrastructure and services. 2. Sole reliance on Microsoft Corporation for critical support and consulting. 3. Potential risk of vendor lock-in and limited negotiation leverage. 4. High spending in the IT services sector for defense operations.
Value Assessment
Rating: fair
The contract value of $172.5 million for Microsoft consulting and premier support over approximately 5.5 years appears substantial. Benchmarking against similar large-scale enterprise support contracts is difficult without specific service details, but the cost per year is roughly $31 million.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract is awarded solely to Microsoft Corporation, indicating a lack of competition. This approach is often used for specialized software or services where only the original vendor can provide the necessary support, potentially leading to higher prices than a competitive bid.
Taxpayer Impact: Taxpayer funds are directly supporting a single vendor for critical IT services, with limited opportunity for cost savings through competition.
Public Impact
Ensures continued operational capability for Army Cyber Command's IT systems. Supports the cybersecurity mission through access to Microsoft's expertise. Potential for increased costs due to the absence of competitive bidding.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and potentially increases costs.
- Long-term reliance on a single vendor creates dependency.
- Lack of transparency in pricing without competitive bids.
Positive Signals
- Provides essential support for critical defense IT infrastructure.
- Leverages specialized expertise from the software provider.
- Ensures continuity of operations for cyber command.
Sector Analysis
This contract falls within the Information Technology sector, specifically focusing on software consulting and support services. Spending benchmarks for similar large-scale, sole-source IT support contracts within the Department of Defense can vary widely based on scope and duration, but this represents a significant investment.
Small Business Impact
This contract does not appear to involve small businesses, as it is a sole-source award directly to Microsoft Corporation. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny regarding the justification for not seeking competitive bids. Oversight should focus on ensuring the necessity of Microsoft's exclusive services and the reasonableness of the pricing over the contract's duration.
Related Government Programs
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
- Vendor lock-in risk
- Long contract duration
Tags
department-of-defense, ga, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $172.5 million to MICROSOFT CORPORATION. ARMY CYBER COMMANDS MICROSOFT CONSULTING SERVICES AND MICROSOFT PREMIER SUPPORT
Who is the contractor on this award?
The obligated recipient is MICROSOFT CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Information Systems Agency).
What is the total obligated amount?
The obligated amount is $172.5 million.
What is the period of performance?
Start: 2021-09-30. End: 2026-03-31.
What is the specific justification for awarding this contract sole-source to Microsoft, and how does it ensure value for money?
The justification for a sole-source award typically centers on the unique capabilities or proprietary nature of the product or service, where only one vendor can fulfill the requirement. For Microsoft services, this often relates to deep integration with their software ecosystem. Ensuring value for money in such cases relies heavily on robust internal cost analysis, benchmarking against similar internal or external contracts, and strict negotiation of terms and service levels to mitigate the lack of competitive pressure.
What are the primary risks associated with this sole-source contract for Army Cyber Command?
The primary risks include vendor lock-in, where the command becomes overly dependent on Microsoft, making future transitions difficult or costly. There's also the risk of paying premium prices due to the absence of competition, potentially exceeding market rates. Furthermore, reliance on a single vendor could limit access to innovative solutions from other providers and create vulnerabilities if Microsoft's support or product roadmap changes unfavorably.
How does this contract contribute to the overall effectiveness of Army Cyber Command's mission?
This contract is crucial for maintaining the operational effectiveness of Army Cyber Command by ensuring access to expert support and consulting for their Microsoft-based IT infrastructure. This includes maintaining system uptime, implementing necessary updates, and leveraging Microsoft's specialized knowledge for complex cyber operations. The premier support likely offers faster response times and dedicated resources, which are vital for a high-stakes environment like cyber command.
More Contracts from Microsoft Corporation
- Microsoft Consulting Services (MCS) and Microsoft Premier Support (MPS) for the United States Marine Corps (usmc — $220.0M (Department of Defense)
- - Metss for Usmc — $160.7M (Department of Defense)
- Labor — $148.0M (Department of Defense)
- Microsoft Consulting Services (MCS) and Unified Support for the U.S. Navy / Program Executive Office Digital and Enterprise Services (PEO) Digital — $119.5M (Department of Defense)
- Microsoft Unified Support (MUS) — $104.4M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)